EUR – Opened early Europe at $1.3054, Euro-dollar closed in NY at $1.3054 after rate had pulled back from a late session high at $1.3076. Rate nudged higher in early Asia, pushing up to challenge at $1.3065. Failure prompted a corrective pullback, aided by decent euro-yen sales from Japanese banks, which took rate to lows of $1.3046. RBA 25bp cut was as expected but the hawkish statement prompted a quick bounce in Aussie-dollar, which in turn helped euro-dollar to recover back to retest $1.3065. Offers again thwarted attempts to move higher and rate settled between $1.3050/60 ahead of the European open. Fresh demand into the European open took rate through the Asian high and on to retest Monday’s high at $1.3076. Asian sovereign supply provided some resistance but rate managed to extend recovery to $1.3082 , the move aided by strong demand in euro-Swiss as reports said Cr.Suisse would impose a more punitive than expected negative charge on Chf holdings. Failure to build prompted short term specs to cover back, taking rate to $1.3060 but fresh buyers quickly emerged to cushion.
GBP – Opened early Europe at $1.6094 and stg0.8111, GBP closed in NY at $1.6095, just off NY traded highs at $1.6116 and after recovering off a shallow pullback low of $1.6086. Rate extended its recovery to challenge the $1.6100 level but met willing sellers here which took rate back to retest the NY pullback low, posting a session low at $1.6087. The post RBA rate cut bounce in Aussie-dollar(hawkish statement) provided a fresh boost for risk and lifted cable to a high of $1.6102. However, headwind sales prevented rate in building and pressed it back around $1.6095 ahead of the European open. Cable picked up fresh demand interest into Europe, extended highs to $1.6104 in early trade before meeting headwind Asian sovereign sales. However, demand soaked up this supply and eventually allowed rate to edge up to retest Monday’s high. Reports that Credit Suisse would impose a more punitive negative interest rate on Chf holding prompted a softening in the Swiss franc with flows into sterling driving cable to highs of $1.6130 late morning. Disappointing UK construction PMI was ignored.
JPY – Opened in early Europe at Y82.06 and Y107.22, Euro-yen came under sell pressure from Japanese accounts in early Asia, with traders linking the move to a weak Nikkei opening which was seen as risk negative. The cross pressed to a low of Y107.04, from an opening level Y107.35, but decent demand sitting into Y107.00 cushioned the move and allowed rate to recover above Y107.30. Dollar-yen squeezed away from its NY close of Y82.24, the rate taking direction euro-yen’s slippage and traded a low of Y82.04. Dollar-yen opened heavy in Europe and made a show under Y82.00 on strong yen sentiment, rate extended losses to Y81.86 flushing light stops on the move. Euro-yen tracked the dollar and slipped from Y107.34 to Y106.93, Asian sovereign supply in euro-dollar seen adding weight to the move. Strong demand in the dip bounced back above Y107.00 and extended recovery efforts to Y107.30, later settling around Y107.20 into NY. Dollar-yen recovered to Y82.05, before late
profit take sales eased to Y81.95. Stops noted on a break of Y81.80/70, ahead of strong demand into Y81.50.
EasyForexNews Research Team